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Analysis of travel bookings highlights business uncertainty and persistent inflation as companies reduce international trips

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HotelHub’s Q1 2024 report reveals a shift towards more domestic business travel amid global inflation, with a significant drop in international trips and rising hotel costs.

LONDON – HotelHub, leading hotel technology solution provider for travel management companies and their corporate customers, has released its Q1 2024 HotelHub Index, an analysis of over 15 million hotel bookings, revealing an uncertain business travel environment driven by persistent inflationary pressures.

The findings reveal that companies are sanctioning more domestic travel in place of international trips, which have declined by 19% on a year over year basis. Domestic bookings are rising as a proportion of all corporate travel and now represent 62% of all trips, up from a 52% share in Q1 2023.

The decline in international travel noted this quarter marks a stark break with the gradual recovery of overseas business travel seen since the end of the pandemic. This move suggests companies remain cautious in an uncertain economic environment and are likely dispatching staff based within a country rather than allocating budget for costlier international trips. Growth in domestic business travel is pronounced in Asia (46% increase) and Europe (30% increase). In North America, 81% of stays are now domestic, reflecting a 5% increase compared to Q1 2023.

Inflation is still very apparent in the travel industry. The Index shows the average room rate per night continues to rise, growing by 8% between Q1 2023 and Q1 2024 on a global basis, increasing from an average of $164 to $177 per night. In fact, in just two years average rates have increased by 12% in New York, 22% in London, and 27% in Paris.

There are also signs that business travellers are condensing trips to stay within budget as the average cost of a trip increased by 7% from $414 in Q1 2023 to $442 in Q1 2024. In Asia, the average duration of stay has decreased by 8%, and in the Middle East & Africa, it has decreased by 11%. Despite this trend, the average international length of stay has increased by 5.3%, indicating that while international travel is less frequent, business travellers are extending trips to accomplish more when they do fly.

Paul Raymond, Director of Business Development at HotelHub said: “On the whole, business travel is still growing but there are some concerning trends in this data. A reduction in international trips is often an indicator of  overall business confidence and broader spending in the corporate sector. The rate of inflation may be falling in some areas of the economy, but in hospitality we’re still seeing significant price increases that many corporate travel departments are finding challenging .”

“While the data shows clear industry-wide trends, at HotelHub we understand that each business has unique travel needs. By booking through a platform such as ours, businesses can proactively manage their travel strategies  to offset rising costs.

HotelHub continues to be the premier hotel booking platform, designed to support travel management companies with access to the most complete hotel inventory and best rates sourced from multiple partners. By consolidating content, reporting and payment tools into an end-to-end booking solution, HotelHub ensures greater efficiency and complete data visibility for its users.

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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.